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A Barclays Bank in Chiswick, West London, sold for £4 million as Acuitus raised £22 million from its second commercial property auction at the Millennium Hotel in London's West End.
The 2,900 sq ft Barclays Bank at 149-153 Chiswick High Road, with residential and office accommodation above, sold for Knight Frank LPA Receivers at a yield of 4.89 per cent. The 56-lot sale saw Acuitus raise nearly £4 million more than in its maiden sale. Bank-occupied investments once again proved popular as another Barclays branch in Folkestone sold for £1.31 million at a yield of just over five per cent, again for Knight Frank LPA Receivers.
Richard Auterac, Acuitus auctioneer, says: "It's been a tough week for commercial property auctions - as results from other sales have shown - but our auction has demonstrated that quality still sells and sells well. This is illustrated by the average sale price, which was £821,212 per lot. The market has changed during the past three months, with buyers and sellers still coming to terms with the new conditions. Today's sale was very much back to basics, with ground rents attracting strong interest and also investments with solid covenants - such as the three Enterprise Inn pubs which sold for a total of £3.189 million at an average yield of under seven per cent.
"Realistic pricing of short-income properties is essential and we anticipate that the expectations of both buyers and sellers will move into closer alignment over the coming months. The sales that have taken place this week have provided a clear pointer for re-basing the more secondary investments for the autumn, when I think buyers will be able to proceed with the benefit of clearer pricing levels. "
Other notable sales included a prime freehold retail and residential investment at 59 St John's Wood High Street which sold for £1.95 million at a yield of 4.45 per cent and three ground rent investments on the Middlefield Industrial Estate in Sandy, Bedfordshire, which sold for a total of £938,000 at an average yield of 5.4 per cent.
Among short-lease investments: a 16,143-sq ft unit at Glasgow Airport, owned by Scottish Widows Investment Partnership and let to DHL with five years to lease expiry, sold for £1.1025 million, while a Clinton Cards unit on Chesterfield High Street with six months to run sold on behalf of Jones Lang LaSalle LPA Receivers for £725,000. A Nando's in Harrow, Middlesex, offered by F&C Reit, successfully sold for £1.1 million - a yield of 6 per cent.
Mr Auterac says: "The strong performance of the banking and central London pub lots in the sale was pleasing, but the performance of the short-lease investments shows that if assets are properly brought forward to the market then they will find a buyer. It is this tailored approach that Acuitus specialises in.
"It's a very precise market at present, but there is definitely value to be had and we expect that the autumn sales will attract a new raft of buyers who have been waiting to enter the market and seek to take advantage of where they believe assets are underpriced."
Savills Commercial sales catalogue for its July 12 auction consisted of 27 lots and achieved an 89 per cent success rate. Guide prices were £20,000 to £950,000 and included instructions from KPMG, major housing associations, trustees and LPA receivers. Simon Parker, head of commercial auctions at Savills, comments: "Our lot sizes were smaller and on behalf of 'motivated' sellers. It's getting the guide prices right that's critical. Guide at a yield of 11 to 12 per cent and you achieve seven to eight per cent.
Properties of note included 8 Chapel Market, in Islington. The vacant freehold retail and residential building, conveniently just north of central London, totals 2,495 sq ft (232 sq m) over basement, ground and three upper floors, including a roof terrace with views across central London. The property offers full vacant possession upon completion. This lot was originally offered at auction for a guide price of £400,000 to £425,000 but after Savills showed 50 people around it, this went up to £500,000. It sold in the room for £675,000 after "fevered bidding," says Mr Parker.
"All the keenest buyers were local private investors buying local investments," he says. "We sold a local chip shop at a yield of 6.7 per cent - that's getting towards edge of prime yields."